How important are values in business, really?
- Dr. Malcolm Tyson
- Sep 30, 2019
- 6 min read
Most companies have mission and vision statements that they publicly and proudly broadcast to their employees, customers, and anyone else that wants to know what’s the driving force behind the company. This can also just be the grounding concept that prompted the founder to start the company in the first place. If we look a little deeper, we may also find the core values of the company, which are the fundamental beliefs that guide the behavior of the company with its employees and customers. But really, how important are these core values? Values in a company that take them seriously are a standard, but to those that don’t entrench them in everything they do, values mean nothing. This post will explore how important or unimportant core values are to companies.
Let’s take a look at companies that seem to hold their core values with high regard. Not just through lip service and window treatment but with how they treat their employees and customers, which are the fundamental elements of innovativeness.
MARRIOTT
This luxury hotel chain named after its founder JW. Marriott is a leader in the hospitality industry offering luxurious amenities and higher tier experiences for its customers. Its value statement is “we put people first, we pursue excellence, we embrace change, we act with integrity, and we serve our world.” From this we can distill Marriott’s values as a priority list: employees, excellence, change, integrity and service. With over 175,000 employees around the world, its no wonder their people are the top of that list. The Marriott Management Philosophy outlines J.W. Marriott’s tradition of values and beliefs that he instilled in the culture of the organization that he founded in 1984. These values have been and will continue to be important for the future growth of the company. And based on these values the company is continuing to grow, as evidenced by its 2018 adjusted net income totaling $2.2 billion, which is a 38 % increase over the prior-year adjusted. Company’s don’t grow like that without solid management, infrastructure to withstand exponential growth, and fundamental beliefs that guide the company morally. Here’s a great article about why Marriott employees stay.
AMAZON
This iconic e-commerce giant is an internet-based retailer, manufacturer of e-book readers and Web-services provider. Amazon was founded by Jeff Bezos in 1994 offering any book to any reader anywhere. Its values are customer obsession, Invent and simplify, hire and develop the best, deliver results, earn trust of others. Although the business model has come under scrutiny for being just a retailer of consumer products, the values support Mr. Bezos’ contention that Amazon is a technology company that simplifies online transactions for consumers. The enterprise has also held to the ‘invent’ portion of that value, as evidenced by the number of patents applied for and / or granted to Amazon. In addition, Amazon has held to its ‘deliver results’ value by expanding its operations beyond retailing and delivering results in its e-book readers, Amazon Web Services portfolio, Fulfillment services and Inventory management systems. With the second-largest workforce in the US, Amazon has maintained its value to hire and develop the best. Here’s an article about the rollout of one of Amazon’s employee engagement initiatives. Finally, according to this report, Amazon has earned the trust of consumers in an area that has been and will continue to be hotly debated, privacy and use of consumer data.
Alternatively, the following company’s have taken a less literal approach to its value statements. Obviously, business leaders don’t’ consciously violate their values or intend to do so when they start out as wide-eyed, eager entrepreneurs but something happens that makes their value system breakdown, consequently making values less of a priority to them.
ENRON
Another company founded in the 80s was major player in the interstate pipeline sector then launched its broadband services unit to trade commodities online. Enron’s values are Respect, Integrity, Communication, and Excellence. In addition, it had a "
Vision and Values" mission statement which declared, "We treat others as we would like to be treated ourselves. We do not tolerate abusive or disrespectful treatment. Ruthlessness, callousness, and arrogance don't belong here. Yet if we look at the timeline and events surrounding its devastating collapse, we see a lack of integrity, and ruthlessness, callousness, and arrogance were more than welcome there. Enron stock went from a high of around $90 per share to $.26 during its Chapter 11 filing. The CEO and CFO of Enron didn’t stay grounded in the principles they touted as their values. Consequently, the instability of the value system at the top led to a cascading effect throughout the company.
UBER
Founded in 2009 by two entrepreneurs who developed an app that would let people tap a button to get a ride after then couldn’t get a ride during a snowy night in Paris. Its value are: we build globally, we live locally, we are customer-obsessed, we celebrate differences, we do the right thing, we act like owners, we persevere, we value ideas over hierarchy, we make big bold bets. While these values lead one to believe the values of employees and management are distinctly different, some of these values have been maintained by Uber since their launch in San Francisco. However, claims of exorbitant surge pricing run counter to a customer obsession and following that up with conducting a background check on the customer. The lawsuit that forced Uber to pay minimum wages and provide health benefits to 35,000 drivers and treat them as employees was also a gut-punch to their value system. Other states followed this lawsuit and places an extreme amount of scrutiny on Uber's business model, mission and vision. In addition, the settlement of a false advertisement class action suit against Uber related to the lack of integrity exhibited in conducting background checks after a New Dehli women was allegedly assaulted by an Uber driver. Negative publicity highlighting the misogynistic and toxic culture was only the tip of the iceberg that would make Uber synonymous with every other violator of the #MeToo movement. One issue that stands out to me and represents a microcosm of Uber's departure from its values is the irreconcilable chasm it created between taxicab companies around the world…since its inception. If Uber valued ideas of hierarchy, why was it so difficult to compromise with taxicab companies? Was Uber's leadership so committed to their business model that they weren’t willing to adjust it for the betterment of those in the industry?
As we can see, the values of a company are only as important as modeled by the company’s leaders on a regular basis. Where the organization presents its values for public consumption but there is a disconnect in the exhibition of those values in daily operations, then we must assume the values are not important. Another assumption we can make is that if a company’s values are really important, they will show up on their profit and loss (P&L)statement. A mentor once told me that if something is important to a company they would put “their money where their mouth is”. It would be interesting to see where values are manifest themselves on the P&L for those companies that seem to exhibit their values in operations.
Here are Zappo’s and Best Buy’s interesting value statements and a list of the 9 worst mission statements of all time.
Leadership Playbook -- Tactic #83
5 Invaluable Things Leaders Need To Know to Successfully Cultivate Value-Driven Cultures
Leaders reinforce the mission and vision of the business with their own values. The values are the bedrock upon which the mission and vision are built and sustained; so, if a leader lacks integrity, the mission and vision statements are unsustainable because they’re founded on instability.
Leaders carry out their values every day and are uncompromising in their execution and integration of their values in the operations of the organization.
Leaders embedd their values in the culture of an organization through the day-to-day interaction with employees, customers, and other members of their business ecosystem.
Leaders represent the border control for their culture by allowing in and modeling the behavior that aligns with the value system. Values set the parameters for cultural fit for new hires.
Leaders encourage the behavior that strengthens the value driven culture through recognition programs that publicly celebrate employees or even customers that exhibit and embody the value system.
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